AlphaReveal and Forex

Some traders may wonder how AlphaReveal works on forex given that we developed our software for futures. We decided to test it and see how it worked. Have a look at the screenshot below:

On the left, you see the EUR/USD forex data and on the right you see the 6E currency futures data from IQFEED.

A few things to note, we lose the market depth on forex, and thus we've turned those columns off. The total volume histogram from EUR/USD is almost identical to the 6E total volume histogram. It is important to note that forex doesn't have bid and ask data and as such it is not possible to track the buying/selling pressure in the way that we can with futures. The historical bid/ask data in our Orderflow Bars is being built based on up/down tick logic. Unfortunately, this lack of true bid/ask data causes some other issues but it may be something we can accommodate in a future release. For example, all the trades in our OrderFlow Monitor come through on the bid. As a workaround, we've turned off our OrderFlow Monitor and have instead switched to the V.I.T for tracking the order flow in real-time. Despite the limitations, AlphaReveal still provides a very compelling experience when used on forex directly.

Based on what we see here, if you trade forex then you have a few options. The first way is to accept the limitations and run AlphaReveal directly from the forex data. Even given those limitations, AlphaReveal still provides a great way to read the market. The second way is to watch the currency futures while placing your trades in the forex market. And, finally you could open up two AlphaReveal instances as we have here and track both simultaneously. This may be especially useful for tracking the spread using the OrderFlow Monitor (not shown in this example).


Monday, February 03, 2014 12:42:00 AM


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Risk Disclosure:

Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure:

Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.